The pair’s stance has shifted to neutral from bullish in the near term, according to FX Strategists at UOB Group.
“Expectation for sideways trading was wrong as USD dropped sharply to a low of 113.17. While the drop appears to be running ahead of itself, there appears to be room for extension to 112.90 before a stronger recovery can be expected”.
“The rapid and sharp drop last Friday took out the stop-loss for our bullish view at 113.30. The bullish phase was short-lived and the target at 114.90 was not met. From here, USD has likely moved into a neutral consolidation phase and is expected to trade between 112.50 and 114.20”.